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Arab Spring opens a new world for entrepreneurs
Abdul Basit / 6 December 2012
The Arab Spring has opened a new world with endless possibilities for young entrepreneurs of the region, said former deputy prime minister of Malaysia Tun Musa Hitam.
“The younger demographic, especially, has the potential to bear great influence on the future of the world economy and can be harnessed through increased understanding of these opportunities which will boost investor confidence and resources they put into tapping this market,” Musa told Khaleej Times in an exclusive interview on the occasion of 8th World Islamic Economic Forum (WIEF) in Kuala Lumpur.
Started on Tuesday, the annual forum will run until December 6, 2012. Musa is also chairman of the WIEF’s Foundation.
The truth is that business doesn’t and shouldn’t recognise borders, ideologies, race or religion, he said, adding: “It’s all about the opportunities and this is why the WIEF Foundation invites companies, governments and individuals to work with us for the future economic well-being of our world.”
Commenting on the challanges for the promotion of Islamic finance, he said: “The word ‘Islamic’ should not inspire fear but be a by-word for opportunity.” “By communicating the positive benefits of Islamic finance for both the Muslim and non-Muslim communities, we have no doubt that its prevalence will grow and that it will become an appealing alternative across more markets.”
It is estimated that Muslims have spent $2.1 trillion on the halal economy, $500-600 billion on food and halal related products.
Excerpts from the interview:
What are the changing dynamics in global economy?
The Arab world’s young entrepreneurs are living in a new world — and they are surrounded by a steadily blossoming market. While much has been achieved since last year’s Arab spring, the possibilities are endless. As the countries emerging from the protests begin to introduce new laws, government and civil society, so too will come new opportunities.
The truth is that business doesn’t and shouldn’t recognise borders, ideologies, race or religion. It’s all about the opportunities and this is why the WIEF Foundation invites companies, governments and individuals to work with us for the future economic well-being of our world.
Our future is the youth and, according to a global research by OgilvyNoor, they are “Futurists” — young Muslims who are educated, confident, engaged, discerning and consumption-savvy. The new generation of Muslims share timeless religious values and actively emphasise success and pride in defining who they are, and most significant is their belief in Islam as a tool to bring positive change.
An example of this is Abeer Al-Azzawi, a Canadian Muslim in her 20s who decided to launch her own line of practical, stylish hijabs online — outfits which were functional and true to her faith including ‘sports hijab’ and ‘cold-weather hijab’. We believe that there is a bright future ahead and religion will play a stronger role in driving progress. It is on this end that the Foundation introduced the WIEF Young Leaders Network (WYN) which is a global platform that brings together young leaders, change makers, professionals and entrepreneurs across the globe to connect creative ideas and explore prospects for collaboration. The WYN will hold its annual forum in conjunction with the 8th WIEF, which includes the 5th Marketplace for Creative Arts featuring more than 31 international artists and performers.
How do you see business opportunities after Arab Spring?
Business will serve as the engine for continued social and economic progress. Last year the Saudi government announced plans to create 1.5 million retail jobs for women and elsewhere pro-business policies continues to be pushed on to the statute books.
Microsoft, for instance, has created an Egyptian outsourcing business which employs 65,000 people and generates more than $1 billion every year. And food giant McDonald’s has three times more customers in the Arab world than they do in the whole of Europe.
The best chance for the Arab and Muslim world is business and making sure these encouraging green shoots don’t fail and we all capitalise on a historic opportunity. There are approximately 1.8 billion Muslims in the world and it is undeniable that the Muslim consumer segment represents a significant opportunity for businesses and marketers.
The younger demographic, especially, has the potential to bear great influence on the future of the world economy and can be harnessed through increased understanding of these opportunities which will boost investor confidence and resources they put into tapping this market.
How do you see the future of Islamic finance in GCC or Mena region?
Abdul Muktadir, the State Bank of Pakistan Deputy Governor recently said that true spirit of Islamic financial system is the way forward that may help the global financial system to recover and regain the lost trust of stakeholders. As it stands, the global market for Islamic financial services is said to be on the threshold of strong growth. Kuwait, for example, expects Islamic banking to grow at more than double the pace of conventional banking within their local industry. The same trend is expected in Egypt and the Arab nations.
In particular, we expect to see a growing demand from among medium to high net worth individuals for Islamic finance as they seek banking options which incorporate the transparent and ethical principles inherent in Islamic finance alongside competitive returns.
What are the opportunities between Muslim and non-Muslim communities in the current scenario?
Potential collaborations exist in all sectors. While the Halal and Islamic finance industries are well established and continue to offer significant business prospects, the growth of start-ups in the Muslim world is reflective of the broad range of opportunities.
In Beirut, for instance, there has been a host of new start-ups such as Cinemoz, which provides access to the Arab world’s largest on-line library of films and TV shows. In Dubai, a specialised news service, Diwanee, has been created to provide internet articles in Arabic for women. In Malaysia, the annual private sector driven World Halal Forum and MIHAS Exhibition enables those in the global Halal industry to trade and meet.
Do you see growth in demand for Islamic financial products globally, especially among non-Muslims?
We believe the principles of Islamic finance would hugely benefit Western economic systems emerging from the financial crisis. The global financial market has been turned into one giant casino — derivatives are traded at four times of GDP. This is not a real economy.
Both Muslims and non-Muslims can benefit from Islamic finance as, by principle, it aims to be a more transparent and fairer system of finance. Many of the instruments or investment methods that have contributed to the financial crisis are not permitted by Shariah, such as short selling or non-asset backed derivatives.
Islamic finance is gaining momentum, especially among non-Muslims. Even then the size of global Islamic finance is very small compared to conventional banking. What are the reasons and obstacles?
In Islamic finance, if there are profits, we share them and if there are losses, we all shoulder the responsibility together. In doing so, there is a vested interest of all parties involved to ensure that a project succeeds.
That said, more can be done to strengthen the global Islamic financial markets. There are still many OIC countries even which have yet to establish their own Islamic banks and finance. For example, there are few countries with Islamic banking laws embedded in their rules and regulations, and consistency across all markets remains a challenge. Discussions are currently underway to resolve this.
What’s your advice to other Islamic countries across the world for the promotion of Islamic products?
The government and central bank really have to play a larger role if other countries across the world want to replicate the success seen with Malaysia’s Islamic bonds.
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